Phaeton and Friends: VW Reveals Future Lineup Plans

Volkswagen of America boss man Stefan Jacoby speaks with the Detroit News about VW’s US strategy going forward while admitting a few missteps. Jacoby acknowledges, for example, that the Passat “is too small, and it is almost knocking at the doors of the premium segment. That’s not where the volume is. What we need to do is improve our competitiveness in pricing.” And how does that admission jive with VW’s plan to bring the Phaeton back to the US? Keine ahnung. The DetN never asked.

Jacoby’s primary diagnosis of VW’s US market woes is that the brand is “too much positioned in the corners, in the niches of this big market.” Which means VW’s lamentable (from the enthusiast perspective) trend towards offering blandified US-specific models will only accelerate. Jacoby envisions a car lineup starting with a Polo (“or a car in the range of a Polo”), and moving up to a “New Midsize Sedan” in the Civic mold. From there?

We are looking at the truck segment as well. The Tiguan (compact SUV) has been very well received, but it’s imported out of Europe so we can’t realize the volumes that we could get out of that segment. So we are investigating a second product for Chattanooga, either a compact SUV or another SUV model. Above the midsize new sedan, we’ll have another product, like the Avalon for Toyota. That’s our strategy, to have a lineup ending with the Phaeton (luxury sedan). We will bring the Phaeton back to the market.

Does this mean the new Phaeton will be more of a tarted-up Passat than its ego-fueled predecessor? That actually might explain the “competitiveness in pricing” thing. Except that this so-called Phaeton may essentially replace the Passat. So is the plan to keep the price similar and simply offer more room and call it a Phaeton? The conundrum reveals an underlying problem with VW’s whole approach to the US market.

Lest the boys from Wolfsburg forget, Volkswagen built its reputation in the US by offering genuinely European products at prices well below the true premium European brands. For example, Rabbit sales have been hurt recently by poor fuel efficiency from its lumpen standard drivetrain, while Jetta is rebounding on the back of its diesel and wagon options. In short, VW’s appeal in the US is fundamentally a niche proposition. As such, VW’s forthcoming product line of (likely heavily homogenized) US-only options run the risk of sacrificing VW’s European image.

Specifically, what will the “New Midsize” and “In the Range of Polo” be called? VW (essentially) admitted the the shortcomings of condescending to the US market by recently announcing that the Rabbit name would die. But the “New Midsize” won’t be a Golf, nor will it likely boast such Euro-tech as VW’s “twincharger” engine. The “Range of Polo” will likely be a four door with a possible MPV variant. And as for crossovers like the Golf Plus or Touran? Jacoby would rather get the dumb Americans to shell out for a small SUV.

VW’s new $4 billion plant in Chattanooga represents a huge opportunity for VW to make inroads into the US market. But if VW uses its capacity to produce crude US-only products with little relation to its globally-renowned European products, it could well gain some volume but only at the expense of long-term brand equity. Having tried to “adapt” its European products to the US market (from Merkur through Contour), Ford seems to have learned that too much of their appeal is lost in translation. The Blue Oval is now bringing cars like Focus and Fiesta to the US with minimal homogenization. Why is VW still heading in the opposite direction?